received. The jury concluded that there had been conversion of the money.
The Third Circuit, in reversing and remanding for a new trial, held that the cooperative had converted the milk and not the money if it had converted anything. Noting that the measure of damages for conversion is the market value of the property converted, the Third Circuit found that by accepting the theory of conversion of money, the trial court had relieved the plaintiffs of the burden of proving damages. It was possible that the price the cooperative paid plaintiffs even after the rebate was higher than the market value of the milk; if this were true, plaintiffs had not been injured.
Although I accept the principles enunciated in Knuth, I believe that the present case presents a far different scenario which renders Knuth inapposite. First, in Knuth, liability was inextricably wound up with damages. In order to establish liability, plaintiffs had to show by how much they had been injured. Plaintiffs were entitled to receive the proceeds from the sale of their milk and in fact they had received some amount. It was for the plaintiffs to establish that they had not received the entire amount to which they were entitled.
Here, the FmHA, like the milk producers, held an interest in the cattle which were sold by defendant auctioneers on the open market. It is undisputed that the defendants paid the entire proceeds to the debtor farmer not the FmHA, and I have already concluded that defendants are liable to the government for the conversion. The presumption then arises that the damage caused by the conversion is the value of the property at the time of the conversion. All the parties agree that the price received at each auction reflects the value of the cattle at that time, and therefore, it can be presumed that the government's damages are equivalent to the market value of the cattle limited only by the value of the interest it held in them, i.e. the amount of the then outstanding debt. The government will undoubtedly introduce into evidence the amount of proceeds received from each auction. This will satisfy the government's burden of proof; the burden will then be on the defendants to prove facts which warrant a reduction or mitigation of the damages claimed. Barnes v. United States, 685 F.2d 66, 698 (3d Cir. 1982). I will therefore deny defendants' motion as to the burden of proof.
Defendants have moved to have the issue of proximate cause presented to the jury. Defendants contend that any damage the government has sustained was caused by the farmer-debtor's breach of the security agreement, by the fact that the Nolls made payments to secured creditors and for living and operating expenses, and by the fact that the price of cattle fell while operating expenses rose. These facts simply are not material to the issue of damages.
Again, I remind defendants that this is an action in conversion, and I have already found defendants liable as a matter of law. Conversion is a tort of strict liability. United States v. Gallatin Livestock Auction, Inc., 448 F. Supp. 616, 621 (W.D. Mo. 2978). Moreover, causation is an element of liability which in this case has already been established. Accordingly, I will deny defendants' motion in limine as to proximate cause.
Defendants also seek an order that the issue of avoidable consequences will be submitted to the jury. The Restatement (Second) of Torts § 918 states in pertinent part:
(1) Except as stated in Subsection (2), one injured by the tort of another is not entitled to recover damages for any harm that he could have avoided by the use of reasonable effort or expenditure after the commission of the tort.